Is Network Marketing a Scam?
It isn’t that straight forward. It’s like asking, “are politicians crooks?” Some are, some aren’t.
First of all, How do you measure whether or not something is a scam? Let’s use the famous Amway case of 1979 as our yardstick.
The FTC case is called “In re Amway Corp. 1979″. The FTC found that Amway was not an illegal pyramid scheme – the business model as a whole is not a scam.
But the FTC ruled that the company had to cease price fixing, exaggerating the average income of distributors, and allocating retail customers among distributors – Scammy tactics.
The FTC advises that network marketing organizations that place greater emphasis on recruiting distributors that on product sales may be a scam.
A less quantitative measure of how much of a scam network marketing is would be the affect of the business on your relationships. Basically, use the quality of your relationships as a barometer of how scammy the tactics are. We will discuss traditional methods, newer traditional methods, and internet marketing.
Traditional network marketing methods can strain your relationships. The old-school tactics of inviting all your friends, family, neighbors and coworkers to vaguely described home meeting can hinder your social life. People feel tricked when they show up to your house to “try a new product you found” and they are ambushed by a fast-talking king-pin distributor.
Newer traditional network marketing methods work a little better, and hurt your relationships a little less. This is typically called the “sharing technique”. You share your product with friends, family, and co-workers. If they like the product, you invite them to your home meeting. At least they know why the are at your house in this case. But, people still associate home meetings with network marketing scams.
The newest network marketing tactics include internet marketing. The problem with the internet is that it is like the wild west. There are tons of scammers of all kinds on the internet – including network marketing scammers promising huge income for little or now effort on your part. This is where some of the biggest network marketing scams lie, because the scammers have more anonymity online.
To protect yourself from network marketing scams, you have to ask yourself some important questions about SPECIFIC opportunities.
Does the network marketing company reward both product sales and recruiting? Does the product appeal to enough people to support sustained growth? How does the company back up it’s claims about it’s products? What up-front investment do you have to make? How do the leaders in the organization advise distributors to promote their network marketing opportunity?
Use the FTC ruling and your judgment of how people would respond to the organization’s tactics to decide if you’re dealing with a network marketing scam.
The author contributes related topics such as the XOWii Distributor Scam and the online network marketing training course Online marketing for network marketers.
My personal online success system that never fails me
Don’t rack up expenses buying leads to build your home business. I’m serious, the secret is in the system where you don’ have to do that at all. Why spend your money if you don’t have to, unless of course you want to. I guarantee there’s a better way.
I think it’s incredible when I find that 95% off home business owners, don’t break even when there’s been a system in place for 2 years. Teaching network marketers how to build their business with no out of pocket expenses.
I was caught off guard by the incredible number of quality leads of people interested in my business. I had to use a automatic system to follow up with them, because know I have several other ways to profit from, and keep my costs at zero.
This has taught me a specific step-by-step process for using a targeted information product to not only attract highly qualified prospective partners for my home business, but also how to convert my marketing from an expense to a additional profit center.
I sometimes still can’t believe how this covers my doing business expense. Plus, I most of the time have a pretty good profit above that. Now that I learned the secret is in the system, and put the lost piece of the puzzle in place. My primary business is showing great results.
When you put this system into motion, you’ll see you won’t have to spend another dollar on leads. This is a business building strategy that will change your life forever in minutes. So stop buying those expensive, useless leads!
Global Resorts Network: Perpetual Leverage v. The 2-Up
Oftentimes home business newbies confuse two compensation plans–Perpetual Leverage and the Aussie 2-Up–for each other. They are not. Let me explain.
Basically the Aussie 2-Up system requires you to pass your first two sales up to your upline, and then you’re free to make money for the rest of your membership.
So once you pass up your two sales, you’re independent and never need to pass up any more. All of the commission from your sales goes to you forever and ever. But this is where it gets tricky.
Right when you free yourself to earn money, you depend on your downline to produce it by sending up their “training” sales. After their two sales, however, they turn into your competitors.
What’s the real issue here? The real issue is that after you invest valuable time training them with your skills and painfully acquired knowledge to help them make their pass-up sales, they break away and compete with you for sales.
Take Pay-Per-Click (PPC) advertising. Let’s say, for example, that after several hard-fought months of learning about keywords, PPC and link building, you’ve carved out a veritable treasure trove of a marketing niche for yourself. With your first two members, you unload all of your PPC guru tips to get the money flowing upstream. Sure enough, several weeks later they make their first sale and then their second. No problem, right?
Everything’s cream puffs and marshmallows until your personally sponsored members get their director’s releases. While checking up your PPC’s one morning, you notice that they’ve changed their ads slightly. You zero in. What’s this? They’re gloating that they are much better than the other gal–and that other gal is guess who? YOU! Voila! They are now your competition.
o you follow me? The Aussie plan results in you putting forth great amounts of effort to learn new skills and train your new members to become your competitors. That’s like beginning with a complete cake (the marketplace) and constantly slicing it into tinier and tinier pieces. Who benefits from that scenario? No one.
Now this is where Perpetual Leverage is completely opposite. You never make a challenger because you build a team and never release anyone. That means that if you have eight personally sponsored members, you will have eight Web sites out there working, generating money for you. Why? Because your commission is attached to theirs. If they make $500, you make $500 also. Even if you stop marketing your memberships entirely, you will remain attached to your team, bringing you a passive income.
Stop Selling Your MLM Business; Market It Instead!
If you want to make it big in network marketing, you have to learn to stop selling your business opportunity or products. You must understand how to market instead of selling. When you market, you do not make every effort to convince your prospects to buy from you, instead you build enthusiasm after you have gained the trust of your prospect as you introduce a product to him based on his needs.
You can also market by slowly leading a prospect through a series of follow ups that will help him recognize that he truly needs your product. Marketing allows you to be able to connect with the customer psychologically and make him to naturally desire your products even before you mention it.
That is why successful marketers use marketing to explode their sales via various marketing funnels created to build a deep seated relationship that will have the prospect clinging to every word of the marketer.
When you market effectively, sometimes before you make your company products available some of the prospects will ask you to provide them with the products and they will be grateful to you for such a privilege.
It is noteworthy to say that I see shy people who have learned to market use the Internet to build very successful network marketing business while their mates who have not realized the Internet and who keep selling their MLM by trying to prospect to every Tom, Dick and Harry within 3 feet, as well as make cold calls as their companies advised.
Methods that have proved ineffective and should be discarded. These networkers are doing all this simply because they don’t know any better.
By the time you understand that using the Internet to market your network marketing will give it a great lift, then you would have left 99% of those network marketers who are not using technology to build their business in this very lucrative industry.
So, if you just understand the principle of marketing and how using that principle on the Internet to grow your network marketing business, what is stopping you from using it at once?
Has Your Upline Lied To You Too?
Are you new to network marketing? If you are then maybe you have scratched your head over the old fashioned techniques that your upline is feeding to you. This is not blaspheme, but they could be keeping you from making money by serving up old 90s techniques that just don’t work in the modern Internet world.
You know what I mean the 100 people warm list, the 3 foot rule, the meetings at the Holiday Inns. Now it is time to come into the 21st century because the times have changed my friends, and the smart marketers who understand this “new school” philosophy of building your business online, are going to destroy folks that are doing it the old school way.
It is time to bring your thinking into the new century. This new system of selling does not have you cold calling disinterested people. This new system does not have your stalking strangers on street corners and in coffee shops. You don’t need to buy leads either.
I know what its like to struggle in this industry. For the last 3 years I followed the training of my upline, struggling to get anyone to sign up in my business. I live in Montana, so the pickings are very limited and once you have gone through your list of 100 (if you know that many people) you are done my friend you will be shunned. No more BBQ invites..and if you have changed opportunities more than once FAGEDDABOUTIT, you might as well have a social disease.
So I know firsthand the frustrations, struggles and questions that you have had while trying to duplicate your business through your downline. Even a popular person will struggle using these old world techniques in this new world of marketing. No one likes to chase people, put up fliers, hand out cards and the whole ball of wax…especially if after months of doing it you are not seeing results.
I was lucky to stumble upon a training system that can allow me to work with only serious entrepreneurs 24/7/365. Because the training is online, I just plug my team members into and it is instantly duplicatable, because the system is in place anyone can follow up. Your members get their OWN website and automated training program as well, so that they can train their group. This makes results traceable and predictable.
The system you introduce your team to, can not be complex. Can not have HTML or coding involved in it, at least not for the newbies. You want to create a level playing field for all members of your team to succeed that allows them to make immediate cash flow to fund their business growth. No cold calling, no badgering, no selling your latest opportunity. I have taken away your excuses for failure in your network marketing business, so what are you going to do now?
